logo
Nature of dollar's broad 1H slump means it can extend into 2H

Nature of dollar's broad 1H slump means it can extend into 2H

Bloomberg3 hours ago

Path to dollar recovery is very narrow
The mainly structural nature of the 1H selloff — driven by tariff policies and the associated worsening in global geopolitical and economic expectations and US fiscal considerations — means a sustainable and broad recovery may become feasible if we see a credible softening of, or U-turn in, tariff policies. That's not our central working assumption, but any path toward a multitude of fast and balanced bilateral trade deals would help lift uncertainty, boosting global risk appetite and the dollar.
Crucially, at a time when US economic exceptionalism is questioned, confirmed strength in the core data or recovering soft data is the one scenario that would revive dollar bulls in 2H, in our view, though that's not our central scenario for now.
Euro appeals as yields don't drive FX for now
The euro's strong 1H performance was mainly driven by dollar weakness, but it was broad based and the fiscal stimuli announced by Germany and the EU are further bullish midterm cyclical and structural considerations, though the positive economic impact may not appear in the data before late 4Q or 2026. The expected near-term divergences between the ECB — still dovish — and the Fed — wait-and-see — have led to widening euro-US two-year yield differentials that would, in normal circumstances, give euro bears fresh ammunition. Still, economic and yield factors haven't been driving FX and may be sidelined for now and for as long as structural considerations continue to be key.
We hold on to our expected $1.15-$1.20 euro-dollar range into 2H, while euro bears may have options via the euro-sterling channel.
Yen: Reasons to be bullish beyond BOJ
The yen may be a G-10 winner in allocation strategies at a time when tariff uncertainty has reignited the de-dollarization debate and sparked questioning about US economic strength. This has to be seen in a context in which diversification strategies outside the dollar gain momentum and the yen's allure increases, thanks to a more favorable Japanese economic cycle vs. a decade ago, normalizing BOJ policy and stable institutions. The case for defensive positioning adds to our bullish yen view, and so do valuation and historically low levels.
After 1H's dollar-yen decline of 11%, the pair is now sticky near 145, but the domestic (the BOJ trajectory) and international (de-dollarization) trends identified in 1H remain in place, so our 145-140 view for 2H holds for now.
Sterling has a domestic, international bullish case
Our sterling bull levels have already been reached and we maintain our $1.35-$1.40 sterling-dollar and 0.84-0.82 euro-sterling views into 2H. That's as long as the bullish drivers identified in 1H hold, with pound bulls primed by a better-than-expected economic performance and, just as important, a Bank of England that's resisting dovish temptations and offering yield support. The UK's management of the tariff threat, compared with the EU, gives pound bulls a further reason to shine. The G-10 FX de-dollarization narrative remains a prime bullish driver for sterling, as is the currency's regained appeal in diversification strategies.
A sudden and unexpected turn in risk sentiment is the main risk for sterling bulls, given the pound's high-beta status.
Franc bull? Yes, but beware the SNB
A highly uncertain economic and geopolitical backdrop, and the associated de-dollarization theme, has boosted our defensive FX case this year, with the franc rising almost 10% vs. the dollar and outperforming most others in G-10 diversification strategies. Still, as we flagged on April 7, a strong franc was always going to pose a problem for the SNB, given the stage in the Swiss economic cycle and SNB President Martin Schlegel's remarks on May 6 (see below) validate this assessment, so franc bulls will have to consider the risk of a more interventionist SNB in 2H.
Notwithstanding a 10% slide from its January high near 0.92, our 0.80 expected dollar-franc view holds as we consider 2H, while a 0.9250-0.9550 euro-franc range makes sense for as long as risk sentiment remains in relatively good shape.
Krone appeals most in commodity FX in 2H
In a broadly weaker dollar context and as tariff uncertainty persists, the Canadian dollar remains highly exposed across the G-10. Meanwhile, the Aussie remains attractive on valuation and is under-owned, but it's at the mercy of a late RBA easing cycle and China's economic fortunes. All this implies that the Norwegian krone is the most alluring among G-10 commodity currencies, even after an outstanding 1H gain of more than 11.5% vs. the dollar, given its yield appeal and likely interest in diversification strategies.

Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

HSBC Downgrades Chevron (CVX) to Hold, Lowers PT
HSBC Downgrades Chevron (CVX) to Hold, Lowers PT

Yahoo

time30 minutes ago

  • Yahoo

HSBC Downgrades Chevron (CVX) to Hold, Lowers PT

Chevron Corporation (NYSE:CVX) is one of the 10 Best Oil and Gas Stocks to Buy Now. On May 13, HSBC analysts downgraded Chevron Corporation (NYSE:CVX) from a 'Buy' to a 'Hold' rating and reduced the price target from $176 to $158. This decision came after the company announced it would reduce its share buyback program when it released its first-quarter earnings. A tanker truck making its way through a refinery facility. . Chevron Corporation's (NYSE:CVX) Chief Financial Officer, Eimear Bonner, said that the company's share repurchases for 2025 might be between $11.5 billion and $13 billion, which would be in the lower end of the company's guidance of $10 billion to $20 billion. HSBC analysts pointed out that Chevron Corporation (NYSE:CVX) no longer trades on par with its European competitors in terms of total distribution yield. This change came after the cut in buybacks. The analysts also noted that Chevron Corporation (NYSE:CVX) is currently trading at a 12-13% discount to Exxon based on expected 2025-26 price-to-cash flow ratios. HSBC analysts believe that this discount is fair given the higher risks associated with Chevron Corporation (NYSE:CVX). Chevron Corporation (NYSE:CVX) is one of the world's largest energy corporations. The company produces crude oil and natural gas. While we acknowledge the potential of CVX as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: 11 Stocks That Will Bounce Back According To Analysts and 11 Best Stocks Under $15 to Buy According to Hedge Funds. Disclosure: None.

Ex-Blackstone Investor Raises $7M for Meridian, Private Equity's New AI Operating System
Ex-Blackstone Investor Raises $7M for Meridian, Private Equity's New AI Operating System

Yahoo

time31 minutes ago

  • Yahoo

Ex-Blackstone Investor Raises $7M for Meridian, Private Equity's New AI Operating System

NEW YORK, June 20, 2025--(BUSINESS WIRE)--Meridian, the AI-powered deal management platform for the private markets, today announced its $7 million Series Seed fundraise. The round was led by 645 Ventures with participation from existing investor Chaac Ventures. Meridian also welcomed a group of high-impact angel investors – industry leaders from private equity, credit, and M&A law, many of whom have actively shaped Meridian as early users. Founded by Alexander Sen, a former investor at Blackstone, Thoma Bravo, and CVC, Meridian is building the AI operating system for private market investors. The company combines modern CRM with deep workflow automation and proprietary AI agents to solve the core operational pain points of the world's leading investors – from deal origination to exit. "Private equity still runs on fragmented, manual systems: clunky software, Excel trackers, and scattered third-party data subscriptions," said Alexander Sen, founder and CEO of Meridian. "We're building software that finally reflects how top investment teams source and diligence deals – and we've vertically integrated AI to enable workflows that were never possible before." Meridian brings together a team of over 25 across New York and Miami, with experience spanning enterprise software, AI infrastructure, and capital markets. The company has also hired an experienced customer team who guide firms through the most important technological shift facing private markets today. At the heart of the platform is Scout, Meridian's AI engine. Scout powers intelligent agents that map markets, pinpoint the right companies, automate core evaluation workflows, and surface relationship signals where they matter most. It helps firms spot high-conviction deals before the market does – giving teams a decisive sourcing and diligence edge. Meridian has to date focused on the top of the market, helping some of the world's largest private equity and credit firms run better, more intelligent deal sourcing and evaluation processes. The platform is quickly gaining share at top 100 firms and is now expanding into LPs, investment banks, and global hedge funds – reflecting a broader shift toward modern infrastructure across every layer of private company investing. "There's a generational shift happening in private markets – more complexity, more competition, and more data," said Nnamdi Okike, Managing Partner at 645 Ventures. "AI is a game changer for private market deal sourcing, due diligence and deal management. Firms that do not leverage AI in this new market will be left behind. We were particularly drawn to Alex's insights into how AI will transform private markets, which were developed through his experience in private equity. Meridian is arming investors with the system they'll need to win." The funding will be used to expand Meridian's AI capabilities, accelerate product development, and scale go-to-market efforts globally. "Private market firms are under pressure to move faster, operate leaner, and make sharper decisions," said Sen. "Software is no longer just overhead at private equity firms – it's become a source of edge. The best investors are treating technology and data as central to how they generate outsized returns." To request a demo or learn more, visit About Meridian Meridian is the AI-native operating system for institutional private markets. The platform combines next-generation deal software, massive datasets, and intelligent agents into a single system that helps investors originate, evaluate, and execute with greater speed and precision. Founded by Alexander Sen, a former investor at Blackstone, Thoma Bravo, and CVC, Meridian serves private equity, credit, and broader financial services firms engaged in M&A. The company is headquartered in New York and Miami, with a team of product builders, engineers, and customer leaders with deep experience across enterprise software and private markets. Learn more at About 645 Ventures 645 Ventures is an early-stage venture capital firm that partners with exceptional founders building iconic companies. The firm invests at the Seed and Series A stages and supports founders through its proprietary software platform Voyager and deep Connected Network. 645 Ventures manages over $550M in AUM across five funds. Learn more at View source version on Contacts Media Contact Kelsey Cullen, KCPR650.438.1063kelsey@ Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data

Bitcoin Rises as U.S. Debt Surpasses $37 Trillion
Bitcoin Rises as U.S. Debt Surpasses $37 Trillion

Yahoo

time33 minutes ago

  • Yahoo

Bitcoin Rises as U.S. Debt Surpasses $37 Trillion

Bitcoin (BTC-USD) has continued to climb in 2025, reaching a market capitalization of $2.1 trillion, even as the U.S. national debt surpasses $37 trillion, according to Cointelegraph. The contrast between fiat-driven fiscal expansion and Bitcoin's fixed-supply model has drawn growing interest from institutions, sovereign funds, and individual investors. Warning! GuruFocus has detected 7 Warning Signs with MSTR. Regulatory approval of spot Bitcoin exchange-traded funds in early 2024 accelerated mainstream access, with $45 billion in inflows recorded so far this year. Major players including BlackRock (BLK, Financials), Fidelity, Strategy (formerly MicroStrategy) (MSTR, Financials), and GameStop (GME, Financials) have incorporated Bitcoin into their treasury strategies. Tesla (TSLA, Financials) also remains a high-profile corporate holder. El Salvador, which adopted Bitcoin as legal tender in 2021, has continued to advance its crypto-financed Volcano Bonds project. Bitcoin's appeal as a decentralized hedge against inflation and currency debasement has grown alongside concerns about long-term fiscal stability. While governments continue to rely on stimulus spending and debt issuance, Bitcoin's scarcity and censorship-resistant design present an alternative monetary framework. A Cointelegraph analysis suggests that if just 1% of the $7.6 trillion in U.S. stimulus spending since 2020 had been allocated to Bitcoin, it would have amounted to a $76 billion injectionroughly 3.6% of Bitcoin's current market cap. Such capital flows could have driven a 5% to 15% appreciation in Bitcoin's price due to its low float and high price sensitivity. While volatility and political risk remain barriers to sovereign adoption, Bitcoin's expanding institutional presence, technological upgrades, and cultural significance continue to reshape how investors view monetary policy and long-term value preservation. This article first appeared on GuruFocus.

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into a world of global content with local flavor? Download Daily8 app today from your preferred app store and start exploring.
app-storeplay-store